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Case Number

Appeal No. 93 of 1911.

Advocates

The Honourable Mr. B. Narasimheswara Sarma for the appellants.
V. Ramesam for the respondents Nos. 1 to 5
S. Srinivasa Ayyangar for the sixth respondent.

Judges

Sir John Wallis
Kt., C.J
Srinivasa Ayyangar, J.

Acts

(Section 43, clause 2, and sections 146 and 147.)
SECTION 56 TRANSFER OF PROPERTY ACT
SECTION 82 TRANSFER OF PROPERTY ACT
Transfer of Property Act, section 55,
SECTION 70 CONTRACT ACT
SECTION 69 CONTRACT ACT

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Smart Summary

Structured Summary of the Opinion (Srinivasa Ayyangar, J.)

Factual and Procedural Background

This appeal raised two questions: (1) the personal liability of the sixth defendant, and (2) the amount recoverable from the first defendant, who was the registered holder. The plaintiff, the first defendant and the sixth defendant each possessed portions of the estate. The plaintiff and the sixth defendant had purchased portions of the property in execution of a mortgage decree, and the Government revenue paid by the plaintiff became due after those purchases. The matter came before this Court on appeal from a lower Court (the Subordinate Judge's Court of Vizagapatam). The learned Judge, Srinivasa Ayyangar, delivered the judgment, with Wallis, C.J. concurring.

Legal Issues Presented

Whether the plaintiff can recover anything personally from the sixth defendant for payment of the Government revenue.
What amount the plaintiff is entitled to recover from the first defendant (the registered holder) for the Government revenue — in particular, whether the plaintiff may recover the whole sum personally from the first defendant under section 69 of the Contract Act or only the proportionate share attributable to the property in the first defendant's hands.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Subramania Chetti v. Mahalingasami Sivan	That only the registered holder is personally bound to pay the Government revenue; co-owners/co-sharers who are not registered holders are not personally bound (though revenue may be a charge on their lands).	Relied upon as establishing that the plaintiff cannot recover personally from the sixth defendant, who was not personally bound to pay the revenue.
Paruykyi v. Pakram Haji	That a person who pays the whole revenue to the Government under circumstances similar to the present case is not entitled to a personal decree against co-owners who were not personally bound to pay to the Government.	Used as part of an array of authorities supporting the conclusion that payment by the plaintiff does not create a personal cause of action against non-registered co-owners.
Narain Pai v. Appu	Same principle as Paruykyi: a payer of revenue cannot obtain a personal decree against non-personally-liable co-owners.	Applied as supporting authority; the Court relied on this decision in reaching the same conclusion here.
Raja of Vizianagaram v. Raja Setrucherla Somasehhararaz	Referenced for observations (by Bhashyam Ayyangar, J.) that were based on an assumption that all co-owners/co-sharers were personally liable to pay to the Government.	The Court noted those observations were based on a different assumption and therefore distinguished them from the present case.
Gajapathi Kistna Chendra Deo v. Srinivasa Charlu	Was relied on by Mr. Sarma; cited in discussion whether section 70 of the Contract Act applies.	The Court observed this authority had not been followed in a later case (Raja of Pittapuram), and thus it was not treated as controlling here.
Raja of Pittapuram v. Secretary of State	Reviewed previous cases bearing on the point and did not follow Gajapathi Kistna Chendra Deo.	Noted by the Court as a later review of the authorities; used to show the development of the law and why Gajapathi Kistna Chendra Deo is not followed.
Narain Pai v. Appu (by Sadasiva Ayyar, J.)	Followed Raja of Pittapuram and consistent with the proposition that payment does not give a personal remedy against non-registered co-owners.	Referred to as supporting the Court's conclusion and showing consistency in subsequent decisions.
Yogambal Boyee Ammani Ammal v. Naina Pillai Markayar	Expressed to be to the same effect as Narain Pai regarding non-entitlement to a personal decree against non-personally liable co-owners.	Cited as an authority consistent with the Court's position.
Palmer v. Hendrie	Cited in connection with the principle that the mortgaged property is the primary fund for payment of the mortgage debt.	Used to support the analogy between the present case and mortgage law — that property is the primary fund and contribution between owners is governed by that principle.
Mangalathammal v. Narayanaswami Aiyar	Discussed in the context of who qualifies as "the person interested in the payment of money" under section 69 — that such a person must be one not himself bound to pay.	Relied on to support the Court's view of the proper interpretation of "person interested" for section 69 purposes.
Manindra Chandra Nandy v. Jamahir Kumari	Also cited on the same point regarding the character of "the person interested in the payment" under section 69.	Used alongside Mangalathammal to reinforce the Court's interpretive stance.
Maule v. Garrett (per Cockburn, C.J.)	Referenced on whether section 69 is grounded in common law 'money paid at the defendant's request' or equitable subrogation; Court noted it does not much matter for the present result.	Invoked to show that regardless of the doctrinal basis of section 69, recovery is limited to the person ultimately liable.
Futtch Ali v. Gunganath Roy	Noted for having doubted whether a suit for contribution comes within the scope of section 69.	Relied on as persuasive support for the Court's inclination to hold section 69 inapplicable to suits for contribution.

Court's Reasoning and Analysis

The Court's analysis proceeded in two main parts corresponding to the two issues raised.

1. Liability of the Sixth Defendant

The Court held that the plaintiff cannot recover personally from the sixth defendant because the sixth defendant was under no personal obligation to pay the proportionate revenue to the Government.
The Court relied on the settled principle (citing Subramania Chetti v. Mahalingasami Sivan and other authorities) that the only person personally bound to pay the revenue to Government is the registered holder (the defaulter under the Revenue-Recovery Act); co-owners/co-sharers who are not registered holders are not personally bound, although the Government revenue may be a charge on their lands.
The Court reasoned that payment of the revenue by the plaintiff cannot give the plaintiff any larger or higher right than the Government possessed.
The Court observed that, if the sixth defendant had been personally liable, the Subordinate Judge's Court of Vizagapatam would have jurisdiction to pass a money decree (the cause of action having arisen at least in part within its jurisdiction); however, that Court would lack jurisdiction to enforce a charge over the portion of the estate in the Agency tracts, which must be enforced in the Agency Courts. On this basis the decree of the lower Court as regards the sixth defendant was confirmed.

2. Amount Recoverable from the First Defendant (Registered Holder)

The Court framed the problem by analogy to the Transfer of Property Act (section 56) and mortgage law: where a charge exists on the whole estate and the registered holder is personally liable, but portions of the property have been sold to others, the liabilities between those parties are governed by proportional responsibility relative to the property in their possession.
Using the mortgage analogy, the mortgagor who sells portions of mortgaged property remains personally liable in proportion to the value of the property remaining in his hands, while each purchaser is liable in proportion to the property in his hands. The mortgagee's right to enforce the personal covenant against the mortgagor or the charge against any portion of the mortgaged property remains unaffected.
The Court relied on section 82 of the Transfer of Property Act (contribution) to show that a person who pays the whole amount can seek contribution from the properties of other owners, but that recovery from a particular co-owner cannot exceed that co-owner's proportionate share based on the value of property in his possession.
Turning to section 69 of the Contract Act, the Court considered a literal reading might suggest the plaintiff could recover the whole sum from the registered holder (as the person in law bound to pay). The Court rejected that result as absurd because it would permit the purchaser of part of the property (who pays the revenue) to recover from the registered holder more than the share attributable to the property in the purchaser's hands, effectively allowing the purchaser to recover indirectly the price paid for the equity of redemption.
The Court illustrated the point by a hypothetical involving A (vendor-mortgagor), B (mortgagee), and C (vendee of the equity of redemption), showing that the ultimate liability determines the right to recover and that C could not recover from A more than the ultimately applicable share.
The Court noted that, even if section 69 is founded on common law or equitable subrogation, the practical result is the same: the plaintiff can recover only from the person ultimately liable. The Court cited authorities (Maule v. Garrett and others) to support this view.
Because the present suit is in substance a suit for contribution, the Court emphasized it was necessary to make all persons liable to contribute parties, so that the proportionate liabilities could be fixed; and it expressed the view (citing precedents and statutory provisions for contribution among joint promisors and co-sureties) that section 69 does not apply to a suit for contribution.
The Court referred to Futtch Ali v. Gunganath Roy as a case that had doubted whether contribution suits fall within section 69.

Holding and Implications

The Court's final disposition can be summarized as follows:

Primary holdings:

The decree of the lower Court as regards the sixth defendant is confirmed — the plaintiff cannot recover personally from the sixth defendant because the sixth defendant was under no personal obligation to pay the Government revenue.
The appeal is dismissed with costs.

Implications and direct effects:

Directly for the parties: the plaintiff cannot obtain a personal money decree against the sixth defendant; any charge over the sixth defendant's portion (situated in Agency tracts) must be enforced in the Agency Courts. As regards the first defendant (the registered holder), the plaintiff is constrained to recover only the proportionate share attributable to the property in the first defendant's hands (i.e., the plaintiff cannot, in a suit for contribution, use section 69 to claim the whole sum personally from the registered holder).
The Court stated an interpretive conclusion that section 69 of the Contract Act does not apply to suits for contribution; the Court relied on statutory principles of contribution (including section 82 of the Transfer of Property Act) and relevant authorities in reaching that view.
The opinion confines its relief to the direct effects on the parties: fixing the limits on personal liability and directing enforcement avenues (Agency Courts for property in Agency tracts). The opinion does not purport to lay down an expansive new rule beyond the particular issues decided; it applies and synthesizes existing authorities to resolve the two specific points in the appeal.

Concurring opinion: Wallis, C.J. agreed with the judgment.

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Rajah V.V.S. Jagapatiraju Bahadur Garu v. Rajah T.P.R. S.L.R. Sadrusannama Arad Dugarazu D.K.D.R. Bahadur Garu

The Judgment of the Court was delivered by

Srinivasa Ayyangar, J.:— Two points are raised in this appeal, first as to the liability of the sixth defendant, second as to the amount recoverable from the first defendant, the registered holder.

So far as the sixth defendant is concerned it is clear that the plaintiff cannot recover anything personally from him as he was under no personal obligation to pay the proportionate revenue to the Government. It is now settled that the only person who is personally bound to pay the revenue to Government is the registered holder, who is caller the defaulter in the Revenue-Recovery Act, and that co-owners or co-sharers who are not also registered holders are not under any such obligation, though the Government revenue may be a charge on the lands in their, holding — Subramania Chetti v. Mahalingasami Sivan(1). Payment of the revenue by the plaintiff could not give him a larger or higher right than what the Government had. See Ghose on Mortgages, page 371, and Freeman on Co-tenancy, pages 254 and 349. On this principle this Court has held in. Paruykyi v. Pakram Haji(2) and Narain Pai v. Appu(3), that a person who pays the whole revenue to the Government under circumstances similar to the present case is not entitled to a personal decree against the co-owners or co-sharers who were not under a personal obligation to pay to the Government. The observations of Bhashyam Ayyangar, J., in Raja of Vizianagaram v. Raja Setrucherla Somasehhararaz(4) were based on the assumption that all the co-owners-or co-sharers were liable personally to pay to the Government. Nor do we think that section 70 of the Contract Act has any application to the present case, Gajapathi Kistna Chendra Deo v. Srinivasa Charlu(5), on which Mr. Sarma relied has not been followed in Raja of Pittapuram v. Secretary of State in which all the previous cases were reviewed by Spencer, J., and this, case was followed in Narain Pai v. Appu by Sadasiva Ayyar, J. who was himself a party to the decision in Gajapathi Kistna Chendra Deo v. Srinivasa Charlu. Yogambal Boyee Ammani Ammal v. Naina Pillai Markayar is also to the same effect. If the sixth defendant had been personally liable to pay, the Subordinate Judge's Court of Vizagapatam would have jurisdiction to pass a money decree, though the sixth defendant was residing in the Agency tracts, as the cause of action arose at least in part within the jurisdiction of the Vizagapatam Subordinate Judge's Court; but that Court has no jurisdiction to enforce a charge over the portion of the estate purchased by the sixth defendant as it is situated in the Agency tracts, and the plaintiff must be left to enforce his charge in the Agency Courts. We therefore confirm the decree of the lower Court as regards the sixth defendant.

The next question which alone admits of any doubt is the amount, which the plaintiff is entitled to recover from the first defendant, the registered holder. The plaintiff, the first defendant and the sixth defendant are each in possession of portions of the estate. The Government revenue paid by the plaintiff accrued due after the purchase by the plaintiff and the sixth defendant of portions of the property in execution of a mortgage decree. If it was a case of a private sale under section 56 of the Transfer of Property Act, the plaintiff and the sixth defendant would each be bound to pay the proportionate share of the Government revenue due on the lands in their possession; the fact that the purchase was made in a Court-sale does not make any difference. The position therefore is this: There was a charge on the whole estate in favour of the Government, and the registered holder, the first defendant, was also personally liable to pay the amount of the charge to the Government. (We are assuming that the statutory liability of the registered holder is a personal liability.) The case is analogous to that of a mortgagor who had covenanted to pay the mortgage money and who afterwards sells portions of the mortgaged property to several persona subject to the mortgage. As between the mortgagor and his vendees, the mortgagor would be liable in proportion to the value of the property in his hands, while his vendees would be liable in proportion to the value of the property in their bands. This of course would not affect the right of the mortgagee to enforce the personal covenant against the mortgagor or the charge against any portion of the mortgaged property. If in such a case the whole amount is collected from the mortgagor on his personal liability or by the sale of the property in the bands of any one of the owners, the person who so paid the money or out of whose property the mortgage amount was realized would be entitled to contribution from the property of the other owners under section 82 of the Transfer of Property Act. The mortgaged property is considered the primary fund for payment of the mortgage debt: Jones on Mortgages, sections 736 and 740; also see Palmer v. Hendrie. If therefore the present plaintiff had asked for contribution out of the properties, he could not have recovered more than the amount payable by the first defendant, in proportion to the value of the property in his hands. For example if the plaintiff was the purchaser of one-third share, sixth defendant another one-third, the first defendant remaining in possession of the other third, whoever paid the whole of the charge, whether plaintiff or the sixth defendant or the first defendant, would be entitled to recover one-third from each of the remaining two as a charge on the property. Does the fact that the plaintiff sues under section 69 of the Contract Act to recover the money personally from the registered holder make any difference as regards the amount claimable from him? Reading the terms of section 69 literally in the case supposed, the plaintiff, it may be contended, would be entitled to recover the whole amount and not merely two-thirds or one-third personally from the registered holder, for the first defendant was the person who in law was bound to pay the revenue; the plaintiff of course was interested in the payment, i.e, he was not a volunteer. That, I think, would be manifestly absurd, for the property in the hands of the plaintiff is itself liable to pay One-third of the Government revenue, and it is this liability on his part that gives him a right to make the payment at all to the Government, so as to enable him to recover back from the co-owners the share of the revenue which they personally were bound to pay or for which the property in their hands was liable. A simple illustration will make this matter clear. A mortgages certain lands to B and sells the property subject to the mortgage to C. Supposing B sues C on the mortgage, and C to save the property pays the mortgagee; could C recover the money from A, he being the person who under law was bound to pay within the meaning of section 69? clearly not; for as between A and C, C is the person who is bound to discharge the debt, though so far as B, the mortgagee, is concerned there is no novation of the liability of A; the position of A in such cases is said to be analogous to that of a surety, C being the principal debtor. It is the ultimate liability that determines the right to recover the amount paid to discharge the original liability. It is possible to contend in the case above said that C is entitled to recover from A personally she amount of the mortgage debt, but that A in his turn would be entitled to a charge upon the mortgaged property for the sum which he paid to C and recover as much as he can from the mortgaged property, which amount may conceivably be less than the amount which he paid; this would be untenable, because the purchaser of the property subject to the mortgage would then be entitled indirectly to recover back the amount paid by him for the sale of the equity of redemption. To put the converse case, if A had been sued by the mortgagee personally and had been obliged to pay B, be certainly would be entitled to called C to pay back the money which he paid. In an English conveyance on sale of the equity of redemption a covenant would be implied on the part of the vendee to indemnify the vendor from all the consequences of non-payment of the mortgage amount, by the vendee. Under the Transfer of Property Act, section 55, though there is no implied covenant of indemnity the same result would follow as the statute makes it obligatory on the part of the vendee to discharge the mortgage as between him and his vendor though the liability, of the Vendor-mortgagor to his mortgagee is not affected. It is clear therefore that the person who is interested in the payment mentioned in section 69 must be a person who as between himself and the defendant was not bound to pay though the defendant may be under an obligation to pay to a third party. See Mangalathammal v. Narayanaswami Aiyar and Manindra Chandra Nandy v. Jamahir Kumari. Whether the basis of section 69 is the Common Law action of “money paid at the defendant's request” or the equitable doctrine of subrogation does not much matter as the plaintiff can in either case recover only from the person ultimately liable. See Maule v. Garrett per Cockborn, C.J, citing Leake, page 45, sixth edition; Sheldon on Subrogation, page 15, section 11. In this case, if the plaintiff and the first defendant were the only two persons who had an interest in the property, and if the plaintiff had paid the whole of the Government revenue he could not have recovered more than the share payable on account of the property in the hands of the defendant. Is the plaintiff also entitled to recover from the first defendant the proportionate share of the revenue payable on account of the properties in the hands of sixth defendant, because the plaintiff is not the person liable to pay that sum? If the plaintiff is allowed to recover from the first defendant the amount payable both on account of the properties in his handa and in the hands of the sixth defendant, unless the first defendant is in his turn subrogated to the rights of the plaintiff (which in more than doubtful), the first defendant would have been compelled to pay the amount really payable by the sixth defendant; that, I think, would be unfair. The present suit is a suit for contribution and it was of course necessary to make all persona who are liable to contribute, whether personally or out of their properties, parties, in order to fix the proportionate amount which each person was ultimately bound to pay. If section 69 applies to a suit for contribution it may be that no effective relief could be given against all the parties so as to dispose of all matters in controversy and avoid multiplicity of suits. In Futtch Ali v. Gunganath Roy, it was doubted whether a suit for contribution comes within the scope of section 69.

“The person interested in the payment of money” must, we think, be a person who is not himself bound to pay the whole or any portion of the amount. It is to be noted that there are express provisions in the Contract Act for contribution in the cases of joint promisors and co-sureties. (Section 43, clause 2, and sections 146 and 147.) We are therefore inclined to hold that section 69 does not apply to a suit for contribution at all. The result is the appeal is dismissed with costs.

Wallis, C.J:— I agree.

K.R

Rajah V.V.S. Jagapat... v. Rajah T.P.R. S.L.R. ...